Friday, February 10, 2012

Web Analytics Frameworks - Who Needs Them?

We all do.

Why? For starters few of us have the time to spend performing in-depth analysis of our marketing activities. However quick reviews of the data result in shallow insights.

A web analytics framework combines set performance indicators for your marketing and website, a sound measurement methodology and processes to assess and diagnose fluctuations in performance.

A well-designed web analytics framework removes a lot of the guesswork from you analysis. It helps your organisation standardise its approach to tracking, analysing and optimising its digital marketing. It also importantly ensures that your organisation agrees on naming conventions and metrics.

In this article I have outlined the five key reasons why you need a web analytics framework.

Web Analytics Tools
But doesn’t Google Analytics (or Omniture, WebTrends, Coremetrics, …) give me everything I need?

No. Web analytics vendors are continuously adding features and modifications to their systems that inevitably increase complexity. They are also trying to solve the reporting needs of a large number of customers. The result is that you have a large number of tools at your disposal but no plan on how to use them together to build something significant.

A web analytics framework is the blueprint against which you use these tools to gather information in the context of your organisational goals and apply this to improve results.

Web analytics is not easy. It requires a deep knowledge of the subject, lots of experience and significant skills to perform well. It is even more difficult to consistently deliver results when staff change.

Documentation of processes and training staff in their usage is a key step that few organisations make. It is critical however when creating performance reports that the formulas and data used are absolutely consistent over time. Implementing a well documented web analytics framework is important to ensure that this occurs. Occasionally in our experience with clients, we have seen how a client’s lack of documentation combined with the absence of a key individual can pose a real and significant threat to their business.

Reduced Complexity and Increased Efficiency
Most web analytics tools have a large number of separate reports that measure virtually any aspect of your website. Identifying which of these are important and in what circumstance is the first step to streamlining the web analytics process.

A web analytics framework provides you with a structured approach to rapidly and efficiently track the performance of your website and digital marketing strategy. Such a framework can greatly assist in reducing the complexity of the reporting and mitigating the risk of misinterpreting the data.

Forward Looking Performance Indicators
More importantly a well designed web analytics framework helps you identify potential issues that may impact upon future sales and profit.

For a large number of websites a visitor is unlikely to convert quickly or the sales process may consist of multiple stages, e.g. a membership-based site where a free trial is offered. In these cases a web analytics framework provides forward-looking performance indicators that can be used to predict future sales. For instance if the site offers a 30 day trial subscription, knowing the average ratio of visitors to purchase and their time to purchase is valuable. From this information you can then forecast future sales based on the current number of trial subscribers.

Alternatively if most customers convert a week after their initial visit then any decrease in the volume of visits to your site may forecast decreased sales in the following week. Proactively monitoring search traffic and identifying this drop before a decrease in sales gives you time to take corrective action.

Knowing that your forward-looking performance indicators are not being reached leaves you time to take action before profitability suffers.

Organisational Alignment
An effective web measurement strategy is one that aligns with your organisational goals. Whilst in some cases a website has a clear objective, e.g. to generate leads or to sell a product, for larger organisations there can be separate and conflicting goals. Additionally in large teams there may be conflicting key performance indicators between team members. For instance if the key performance indicators for one team member is to increase traffic to the site and another is to increase conversion these two key performance indicators are potentially misaligned. To achieve the monthly targets the first person may increase traffic from visitors who are far less likely to convert. The second person is therefore unable to meet their monthly targets due to the influx of unqualified visits reducing the conversion rate.

A web analytics framework can alleviate some of this problem by documenting the relationship between potentially conflicting goals and how the key performance indicators can be set accordingly.

Documented Diagnostic Processes
Sales have dropped this month and you need to find out why? A web analytics framework provides you with a process to identify the likely causes of the drop and to suggest a list of actions to take.

In conclusion for most serious websites it is important that you implement a web analytics framework so that you can be sure that you are measuring the right thing at the right time.


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